Transocean, Diamond Offshore cut to Sell at Citi in negative sector call

|About: Transocean Ltd. (RIG)|By:, SA News Editor

Transocean (RIG +0.2%) and Diamond Offshore (DO +0.4%) are downgraded to Sell from Neutral with a $40 price target at Citigroup as part of a negative call on the offshore drilling services sector.

Pricing power is beginning to erode in the sector, the firm says, believing a clear shift in the balance of power at the bargaining table is occurring.

RIG opens flattish but slipped 1.8% yesterday after issuing its latest fleet status report which showed the Cajun Express deepwater rig received a contract to operate six wells at a dayrate of $495K vs. the previous rate of $600K.

Citi also cuts Noble Corp. (NE +0.5%), to Neutral from Buy.

Others to watch: RDC, ESV, SDRL, HERO, VTG.